[ M A R K E T
R E V I E W
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C H AT B O T S ]
“W
e won’t need a holiday,
we won’t be sick and
we won’t be late when
the trains are on strike.” While I doubt
custodians will spend time programming
their chatbots to give interviews to the
press, this is how I imagine they would
justify their existence if I had asked them.
An ever-present, automated, knowl-
edge-armed piece of software, chatbots
are designed to talk, understand and even
learn, like a human. Combining artificial
intelligence (AI), machine learning and
natural language processing (NLP), this
is a powerful tool for securities services
firms in an industry riddled with outdat-
ed and avoidable manual processes. They
have the potential to reduce errors, costs
and response times in remarkable ways.
Undoubtedly there will be job loses
as the technology advances, but also
redeployment. Chatbots replace humans
in repetitive and mundane roles by being
quicker and more efficient. Now that’s not
a slight on humans, honestly, some of my
favourite people are humans. But where
custodian banks can upgrade their servic-
es by implementing robotics and machine
learning, they will, and this will allow
them to re-deploy personnel to more
value-add roles and relationship manage-
ment positions. If you look back at history,
this has happened repeatedly. Consider
that in the last 100 years, large percentag-
es of people have been working on farms,
railroads or car factories, with many of
those roles now automated or replaced by
machinery or technology. Chatbots are an
evolution of an existing process.
The retail world has done a great job in
rolling out these ‘bots’ and we’re all much
happier for it. Call-waiting times are a
thing of the past, and the opportunity
to live chat over the internet provides
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Global Custodian
Winter 2018
a calming feeling when we’ve not received a package, or want
to complain without the awkwardness of face-to-face human
interaction. As a sign of the rapid development of these technol-
ogies, the transitions from human customer service employees
to chatbots has been seamless, and most of the time you’ll be
unaware you’re conversing with a robot.
PwC has charted the evolution of chatbots from a ‘simple dig-
ital tool’ in 2010, to a ‘conversational analytics platform’ in 2014,
while in 2017 it deemed the technology to have become ‘a digital
assistant’ which can initiate actions on its own.
Much like we’ve seen in the payments industry where peo-
ple now have certain expectations around instant and fee-free
transfers, technology developments in the consumer world have
increased demand for information being readily available in a
matter of seconds. Remember when you had to wait to dial-up
to the internet, or even when there was no internet? Now mobile
phone companies are offering compensation when they experi-
ence a data outage to appease their millions of outraged custom-
ers. The demand for fast-food style life services is reaching the
capital markets.
As the State of Chatbots Report 2018, from Drift says, “In the
on-demand, real-time world we live in, where everything seems
to be just one click away, consumers expect to be able to find the
information they’re looking for quickly and easily. When they
can’t, they get frustrated, and could end up turning to compet-
itors who are providing the type of online experience they’re
looking for.”
The financial services industry lags infamously behind the
retail industry and commercial banking in technology innova-
tion, largely due to complexity and layers upon layers of legacy
technology. Chatbots however, can be loaded up with informa-
tion and plugged in right away where humans currently operate.
While some of the most recent technology phenomena carry
some kind of concern, this one falls in the ‘no-brainer’ category
of advancements. The benefits are undeniable. Along with in-
stant responses, being available around the clock and the afore-
mentioned efficiencies, these bots can be channel agnostic –
available across mobile and web, are multi-lingual, and will learn
from feedback, thus improving the client experience. Through
the use of application programming interfaces (APIs) integrat-
ing with data management platforms, chatbots can also analyse
extracted data as well as web- and mobile-based user interfaces
and deliver the necessary insights to the end customer.
Recognising the value of this ability, Standard Chartered has